Implementing the Concept of Linked Processes

Posted: Jan. 13, 2004, 9:00 a.m., EST

AKRON, OH -- Welcome to the first installment of “AMN Perspectives by Thomas Group: Experience at Work.”

What does “Experience at Work” mean? It means proven methods and techniques applied by seasoned executives resulting in measurable financial improvement. “Work” means that Thomas Group consultants are working implementers. We get into the client’s business and go to work side by side with the management and employees until objectives are accomplished, rather than preparing a plan and leaving it to the company to make it happen.

Through “AMN Perspectives: Experience at Work,” Thomas Group consultants will comment on issues and news within the automotive aftermarket to provide constructive suggestions that work based on our experience in the automotive industry and more than 20 other industries and government agencies.

To be successful in today’s marketplace, an organization’s day-to-day operations must be viewed as a collection of linked processes. When key processes function optimally, an organization’s overall performance improves dramatically:

* Customers receive more effective, faster, and more efficient responses to their needs;
* Employees achieve a much higher degree of involvement, accountability and work satisfaction;
* Different (but linked) departments of the organization interact more smoothly, with much greater speed and with more understanding and effectiveness; and
* The financial performance of the organization improves significantly.

In short, everyone benefits.

There is no magic in the concept of improving linked processes; however, the experience of most organizations is that translating the conceptual ideas of process improvement into significant, permanent, cultural, day-to-day improvements and improved financial results is very difficult to accomplish.

Why?

First, in most organizations, key processes are not understood, linked, measured, managed or systematically focused on for improvement.

Second, the traditional design of most organizations -- functional departments and management hierarchies -- obscures a process focus and inhibits cross-functional process improvements.

Third, very different kinds of metrics are needed to translate process improvement opportunities into improved -- and permanent -- operational changes.

Fourth, most key processes are rooted in the organization’s distant past, yet they survive largely unchanged in the organization’s contemporary culture -- even though changing customer needs, technology and competition have subsequently forced dramatic changes everywhere else in the organization.

And finally, the crux of any successful process improvement effort is motivating and inspiring staff across the organization to change long-ingrained and “natural” work practices. Most organizations find that this is the most difficult, yet ultimately the most satisfying challenge to meet.

A few years ago, a leading Tier One supplier was placed on probation by one of its largest customers because of quality issues and slow responsiveness to a rapidly changing market. Their business process contained a huge diversity in technologies, and staffing levels were straining an already slim profit margin. Rather than taking the well-worn path of new software and more people, they focused on better linkage of enterprise-wide processes -- from design development to fulfillment.

In the first seven months, design cycle time was reduced by 67 percent, and within 24 months manufacturing cycle time was reduced by 50 percent, inventory was reduced by 65 percent, operating profit improved by 50 percent and their largest customer held them up as the new benchmark for all its suppliers.

The key to realizing greater efficiency and freeing up cash in already successful organizations is Thomas Group’s process approach, guided by senior level Thomas Group consultants who gain the confidence and trust of the client’s management and staff. It is our hope that the Thomas Group methodology, and our experience in assisting good companies to become great, will allow us to make a contribution to the automotive aftermarket through our commentary, suggestions and observations.

Thomas Group is a 25-year-old, experienced management consulting firm specializing in improving financial results by increasing speed and productivity, and measuring the drivers of these activities for organizations in a wide variety of industries.

For additional information, visit www.thomasgroup.com or call Mike Manor at 972-401-4444.

To write a letter to the editor, click here: aantenora@babcox.com.

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"AMN Perspectives by Thomas Group: Experience at Work" is written and sponsored by Thomas Group. The opinions expressed in "AMN Perspectives by Thomas Group: Experience at Work" articles appearing on aftermarketNews.com do not necessarily reflect the opinions of AMN or Babcox Publications.